Eastman Kodak Company · NYSE:KODK
Eastman Kodak — Q3 2017 Earnings Presentation
29 slides from Eastman Kodak's earnings presentation, Nov 8, 2017
Slide 1: Q3 2017 Earnings Call
Q3 2017 Earnings Call November 8, 2017
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-looking Statements Pursuant to Safe Harbor Provisions of The Private Securities Litigation Reform Act of 1995 Cautionary Statement Regarding Forward-Looking Statements This presentation includes “forward-looking statements” as that term is defined under the Pri
Slide 3: Agenda
Agenda ▪ Introduction Bill Love, Treasurer and - First line bullet point First line bullet point Investor Relations - Second line bullet point First line bullet point - ▪ CEO Third linePerspective on Q3 bullet point First line2017 bullet pointJeff Clarke, Chief Executive - andline Fourth FY bullet 2
Slide 4: CEO Perspective
▪ Welcome ▪ Strategic Actions Update ▪ 2017 Guidance ▪ Division Overview CEO PERSPECTIVE 4
Slide 5: Strategic Actions Update
Strategic Actions Update ▪ Actively pursuing strategic divestitures and monetization opportunities ▪ Multiple processes with strategic and financial buyers to achieve monetization ▪ Advanced negotiations to complete technology and IP monetization 5
Slide 6: 2017 Q3 Results
2017 Q3 Results Total Company Q3 2017 Q3 2017 Q3 2016 Revenue $379 $411 Operational EBITDA 1, 2 $15 $22 Year over Year Change - B/(W) Revenue ($) ($32) Operational EBITDA ($) ($7) Revenue (%) -8% Operational EBITDA (%) -32% Comparable Basis (excluding FX impact) 3 Revenue ($35) Operational EBITDA ($
Slide 7: Business Factors
Business Factors ▪ Commercial printing market has experienced marked slowdown impacting our Print Systems Division, Enterprise Inkjet Systems Division, and PRINERGY Software License sales. ▪ Behind on plans in commercializing our advanced technologies and intellectual property within our AM3D divisi
Slide 8: 2017 Adjusted Guidance and Cash Outlook
2017 Adjusted Guidance and Cash Outlook Operational ($ millions) Revenue EBITDA FY 2017 Guidance $1,500 - $1,600 $90-$105 Commercial Print Market Slowdown (18) AM3D Commercialization Shortfall (8) Longer Sales Cycle for Brand Licensing (7) Vendor Transitions (5) FY 2017 Adjusted Guidance $1,500 - $1
Slide 9: Short Term Profitability Improvements
Short Term Profitability Improvements ▪ In our Print Systems Division we announced in September a 4-9% worldwide plate price increase ▪ Continuing and accelerating cost actions across the company ▪ Incremental approximately 425 headcount reduction and approximately $45M in annual savings ▪ Making fe
Slide 10: Q3 Financial Summary by Division
Q3 Financial Summary by Division ($ millions) Q3 2017 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 232 $ 33 34 $ 21 $ 55 $ - $ 4 $ 379 Operational EBITDA b/f corp costs 24 3 8 3 1 (6) 1 34 Corporate SGA 11 2 1 2 3 - - 19 Operational EBITDA 13 1 7 1 (2) (6) 1 15 Q3 2016 Actuals PSD EISD
Slide 11: Q3 2017 Summary
Q3 2017 Summary ▪ Q3 operational results and full year outlook impacted by: ▪ A slowdown in the commercial printing industry ▪ Time to commercialize certain AM3D projects ▪ Vendor transition and timing of brand licensing ▪ Higher cost in our film business ▪ Decisive actions to address business facto
Slide 12: Financial Overview
FINANCIAL OVERVIEW ▪ Net Earnings ▪ Cost Update ▪ 2017 Third Quarter Cash Flow ▪ Year Over Year Cash Bridge (GAAP) 12
Slide 13: 2017 Q3 & YTD Net Earnings
2017 Q3 & YTD Net Earnings ($ millions) Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 (Loss) earnings from continuing operations before income taxes $ (58) $ 15 $ (37) $ 23 (Benefit) Provision for income taxes (13) 3 (6) 16 Equity in loss of equity method adjustm
Slide 14: YTD 2017 Financial Summary by Division
YTD 2017 Financial Summary by Division ($ millions) YTD 2017 Actuals PSD EISD FPD SSD CFD AM3D EBPD Total EK Revenue $ 681 $ 105 $ 104 $ 64 $ 151 $ - $ 12 $ 1,117 Operational EBITDA b/f corp costs 78 8 26 5 - (21) 4 100 Corporate SGA 36 6 5 5 10 - 1 63 Operational EBITDA 42 2 21 - (10) (21) 3 37 YTD
Slide 15: Cost Update
Cost Update Run Rate Cost Progress Year Ended FY 2017 December Projection1 31, 2013 % Change Headcount (actual)2 6,007 8,797 -32% Operating Expense $263 $510 -48% 3 Percent of Revenue 17% 22% Corporate Costs $85 $153 -44% Percent of Revenue 3 5% 7% 1 Projection calculated as Q3 2017 Year-to-Date run
Slide 16: 2017 YTD Cash Flow
2017 YTD Cash Flow ($millions) Nine Months Ended September 30: 2017 2016 Change Primary Drivers of Cash: Cash from Operations: Net (loss) earnings $ (35) $ 5 $ (40) Depreciation and amortization 62 82 (20) Pension income (91) (110) 19 Change in fair value of embedded conversion features derivative l
Slide 17: 2017 Cash Outlook
2017 Cash Outlook ($ millions) Operational EBITDA $60 - $65 Working Capital 0 ABL Cash Collateral Requirement Reduction 20 Interest and Dividend Payments (40) Capital Expenditures* (35) Legacy Payments (32) Cash Paid for Taxes (primarily outside U.S.) (25) Restructuring Payments (15) Other (5) Cash
Slide 18: Q&A
Q&A
Slide 19: Concluding Remarks
CONCLUDING REMARKS
Slide 20: Appendix
APPENDIX
Slide 21: Non-GAAP Measures
Non-GAAP Measures In this third quarter earnings presentation, reference is made to the following non-GAAP financial measures: • Operational EBITDA; • Operational EBITDA and Revenues on a constant currency basis; • Operational EBITDA before Corporate Costs; and • Improvement in Operating Expenses on
Slide 22: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the most directly comparable GAAP measure of Net (Loss) Earnings Attributable to Eastman Kodak Company to Operational EBITDA and Operational EBITDA on a constant currency basis for the three months ended September 30, 2017 and 2016, respectively: (in
Slide 23: Non-GAAP Measures
Non-GAAP Measures The following table reconciles the most directly comparable GAAP measure of Net (Loss) Earnings Attributable to Eastman Kodak Company to Operational EBITDA and Operational EBITDA on a constant currency basis for the nine months ended September 30, 2017 and 2016, respectively: (in m
Slide 24: Non-GAAP Measures
Non-GAAP Measures The following tables reconcile the most directly comparable GAAP measure of Operational EBITDA (Segment Measure) to Operational EBITDA before Corporate Costs for each Division for the three months ended September 30, 2017 and 2016, respectively: (in millions) For the Three Months E
Slide 25: Non-GAAP Measures
Non-GAAP Measures The following tables reconcile the most directly comparable GAAP measure of Operational EBITDA (Segment Measure) to Operational EBITDA before Corporate Costs for each Division for the nine months ended September 30, 2017 and 2016, respectively: (in millions) For the Nine Months End
Slide 26: Non-GAAP Measures
Non-GAAP Measures The following tables reconcile the most directly comparable GAAP measures of Selling, General and Administrative Expenses and Research and Development Costs to the Improvement in Operating Expenses on a run rate basis adjusted for non-cash pension credit for the nine and twelve mon
Slide 27: Non-GAAP Measures
Non-GAAP Measures Footnote Explanations: (1) As reported in the Consolidated Statement of Operations. (2) RED utilities variable interest entity, which was deconsolidated on December 31, 2016 (interest and depreciation of RED are included in the respective lines in the table). (3) Composed of intere
Slide 28: Aluminum Price (LME): 1/1/11 – 9/29/17
ALUMINUM PRICE (LME): 1/1/11 – 9/29/17 LME Cash in EURO/MT 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 28
Slide 29: Thank You
< Thank You
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